SBA 7(a) Restaurant Feasibility Study in Illinois

A broad record without a single standout

Illinois is a large and balanced market for full-service restaurants under SBA 7(a), and the cell is notable for scale more than for any one outlier: none of its measures clears our test of distinctness against both the Illinois all-class record and restaurants nationally. From FY2017 to FY2026 the files hold 1,103 loans, together $600.5 million gross. By loan count the state ranks 8 for the program and class, and restaurants rank 1 of 39 inside Illinois. A $250,000 median sits at 1.02x the nationwide restaurant figure for 7(a), while half of loans fall from $74,050 to $656,500. Franchise brands account for 9.7% of loans, a larger slice than in several neighboring cells.

Banks, then boroughs and suburbs

With 293 loans worth $79.7 million, The Huntington National Bank is well ahead of Byline Bank with 98 loans but $104.6 million, a profile of larger average loans. U.S. Bank, National Association holds 54 worth $5.8 million, Newtek Bank, National Association 52 worth $17.4 million, and Northeast Bank 41 worth $7.1 million. The table reflects SBA's holder records and implies nothing about any underwriting. Cook County accounts for 582 loans, followed by Lake 79, DuPage 74, Kane 54, Will 49 and McHenry 37, with Sangamon 27, Champaign and Madison 17 each and DeKalb 15. Annual volume ran from 72 in FY2021 to 175 in FY2025.

Attrition after approval

The cancellation floor is 14.0% of FY2017 to FY2024 approvals, and treating undisbursed loans as cancelled lifts it to 16.1%. Among 401 loans that funded in FY2017 to FY2021, 9.2% are charged off to date and 6.7% were charged off in the first five years. As floors, these are minimums, since loans still open may fail; they tell a lender that restaurant lending carries real loss, in Illinois as elsewhere.

Testing an Illinois restaurant

Start with the trading area, whether Chicago neighborhood, collar suburb or a downstate town. Count competing restaurants, measure daytime and evening traffic, and test whether the concept fits local incomes and tastes. The study then builds sales per seat and sets rent, labor and food costs against it, with build-out measured against a median of $250,000 and a lease long enough to repay it. Given the charge-off floors in this book, debt service coverage should be shown with sales below plan and a slow ramp-up. If a franchise is proposed, its fees and territory rights belong in the model. Because most of a restaurant's value sits in the business, the study should give an appraiser a defensible income case and a clear account of the lease.